Debtors collection period - formula, Finance Basics

Assignment Help:

Debtors Collection Period - Formula

Fomula is given below:

Debtors collection period = 365/ Debtors turnover

Or (365 x Average debtors)/ Annual credit sales

This refers to credit duration that was granted to the debtors on the duration within that they were imaginary to pay their dues to the firm.

The shorter the collection period/credit duration the higher the debtors turnover and vice versa. If no opening debtors are provided requires the closing debtors to represent average debtors.


Related Discussions:- Debtors collection period - formula

Determine the weighted average cost of capital, 1. The current interest rat...

1. The current interest rate is 6.83%. CanGo.com's stock has a beta of 2.0. Estimate the cost of equity. 2. CanGo.com has a bond with a semiannual coupon rate of 9% and 5 year m

Limitations of ratio, Limitations of Ratio Ratios have weaknesses as f...

Limitations of Ratio Ratios have weaknesses as following like: 1. They avoid the size of the firm being compared as in cross-sectional analysis; the firm being compared m

Working capital, #question.component.of working capital

#question.component.of working capital

Financial management, Financial Management On the other hand a financi...

Financial Management On the other hand a financial manager has to meet the company's strategic or long term needs as long term investment are helpful to the company since:

Risk premium of a stock, (a) RBC has 100 loans outstanding, each for $1 mil...

(a) RBC has 100 loans outstanding, each for $1 million, which it expects to be repaid today.  Each loan has a 5% probability of default, in which case the bank is not repaid anythi

Preference shares, what makes a preference shares a hybrid?

what makes a preference shares a hybrid?

Calculate break-even point and profit, Volpe Corporation produces class ri...

Volpe Corporation produces class rings to sell to college and high school students. These rings sell for $75 each, and cost $30 each to produce. Volpe Corporation has fixed costs o

Share price, A firm just announced that it will cut its dividend from 4.9 d...

A firm just announced that it will cut its dividend from 4.9 dollars per share to 2.1 dollars per share at the end of this year. The dividend was expected to grow 2.7% every year b

Calculate the value of the company with borrowing, Suppose the ABC Corporat...

Suppose the ABC Corporation is currently all-equity financed and would like to increase its value by issuing debt. The firm has annual earnings before interest and taxes of $7,0

Government budget deficit, Government Budget Deficit If the Government...

Government Budget Deficit If the Government spends much more than it gets in from tax revenue, it runs a budget deficit. This deficit should be covered or financed either via

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd